What Is a Credit Score?
A credit score is a three-digit number (typically 300–850 in the US, or a scaled equivalent in the UK) that represents how reliable you are as a borrower. Lenders use it to decide whether to lend to you and at what interest rate.
How Credit Scores Are Calculated
In the US (FICO model), the score is made up of:
- 35% — Payment history (on-time vs missed payments)
- 30% — Credit utilisation (how much of your available credit you use)
- 15% — Length of credit history
- 10% — Credit mix (cards, loans, mortgage)
- 10% — New credit enquiries
Credit Score Ranges
| Score (FICO) | Rating | What It Means |
|---|---|---|
| 800–850 | Exceptional | Best rates, easy approvals |
| 740–799 | Very Good | Above-average terms |
| 670–739 | Good | Accepted by most lenders |
| 580–669 | Fair | Higher rates, some rejections |
| 300–579 | Poor | Difficult to get credit |
How to Improve Your Credit Score
- Pay on time, every time — Set up direct debits for at least the minimum payment on every account.
- Reduce credit utilisation — Aim to use less than 30% of your available credit limit. Under 10% is best for a top score.
- Don’t close old accounts — Length of credit history matters. Keep old cards open even if unused.
- Limit new applications — Each hard search leaves a mark. Space applications at least 3–6 months apart.
- Register to vote — In the UK, being on the electoral roll significantly boosts your score.
- Check for errors — Mistakes on your credit file can drag your score down. Check free via Experian, Equifax, or TransUnion.
How Long Does It Take to Improve?
Small improvements are visible within 1–3 months. Significant improvements after major issues (like late payments) typically take 12–24 months of consistent good behaviour.